2020 Charitable Giving Incentives

The CARES Act made several changes to incentivize charitable giving to nonprofits, but these changes only apply in 2020:

  1. Higher Limits on Charitable Donations for Individuals

     

    ​Charitable donations could only be deducted at 60% of adjusted gross income (AGI) prior to the CARES Act and will return to this deduction threshold in 2021. However, in order to encourage those able and wanting to give very generously in a year where charitable donations have been severely reduced due to economic uncertainty, the federal government increased the deductibility limit to 100% of AGI for cash contributions made to public charities.  Therefore, if an individual is filing an itemized return, he or she may donate the full amount of their AGI, leaving taxable income at 0. 

  2. Higher Limits on Charitable Donations for Corporations

     

    Much like the charitable donations for individuals, the CARES Act changed the deduction threshold for corporations in 2020.  For the 2020 tax year, corporations can take advantage of an increase in their deductions from previously 10% to 25%.

  3. Universal Deduction for any Charitable Contribution up to $300

     

    For individuals that do not have an itemized tax return, the CARES Act added a charitable giving incentive of up to $300.  This deduction is an above-the-line adjustment to income that reduces AGI and taxable income.  This only applies to donations at $300 or less to qualify under this 2020 deduction incentive.

If you have questions on your tax situation, please consult with a tax advisor or CPA.  The information presented here is informative only and was correct at the time of creation, but should not be mistaken as accounting, tax or legal advice.

Colorado Christian Academy is an officially recognized by the state of Colorado as a 501(c)(3) tax exempt religious private school who is also approved as an organization who can receive funds that qualify for the Colorado Child Care Tax Credit.